Peelers Company v. Wendt, 2350

• Court: United States District Courts. 9th Circuit. United States District Court (Western District of Washington)
• Citation: 260 F. Supp. 193
• Docket Number: 2797.,No. 2350,2350
• Parties: The PEELERS COMPANY, a Partnership, (now Laitram Corporation), Plaintiff, v. Ivar WENDT and Richard (Dick) Sutterlin, copartners doing business as Sutterlin and Wendt, Defendants. CROWN PACKERS, INC., et al., Plaintiffs, v. Emile M. LAPEYRE, Emile M. Lapeyre, Jr., Fernand S. Lapeyre, James M. Lapeyre, Andre C. Lapeyre, individually, as copartners trading and doing business as the Peelers Company, and Grand Caillou Packing Company, Inc., a Louisiana corporation, and a commendam partner in the Peelers Company, Defendants.
• Decision Date: 29 October 1966

260 F. Supp. 193

The PEELERS COMPANY, a Partnership, (now Laitram Corporation), Plaintiff,
v.
Ivar WENDT and Richard (Dick) Sutterlin, copartners doing business as Sutterlin and Wendt, Defendants.
CROWN PACKERS, INC., et al., Plaintiffs,
v.
Emile M. LAPEYRE, Emile M. Lapeyre, Jr., Fernand S. Lapeyre, James M. Lapeyre, Andre C. Lapeyre, individually, as copartners trading and doing business as the Peelers Company, and Grand Caillou Packing Company, Inc., a Louisiana corporation, and a commendam partner in the Peelers Company, Defendants.

Nos. 2350, 2797.

United States District Court W. D. Washington, S. D.

October 29, 1966.

260 F. Supp. 194

COPYRIGHT MATERIAL OMITTED

260 F. Supp. 195

Ferguson & Burdell, Charles S. Burdell, Thomas J. Greenen, Haugland & Sherrow and Dale E. Sherrow, Seattle, Wash., John E. Close, Aberdeen, Wash., for claimants

Skeel, McKelvy, Henke, Evenson & Uhlmann, W. R. McKelvy, James L. Magee and Michael Mines, Seattle, Wash., Kelley, Drye, Newhall, Maginnes & Warren and John J. Loflin, Jr., New York City, Keith, Johnston, Isner & DesMarias and Guy W. Shoup, New York City, Wm. C. Arnold, Anchorage, Alaska, for defendants.

MEMORANDUM DECISION

BOLDT, District Judge.

Eleven claims for treble damages, all grounded on the same alleged Sherman Act violations, were asserted in these cases. The claims were made by the several plaintiffs in Cause #2797 and, as a counterclaim in Cause #2350, by the defendants Wendt and Sutterlin, co-partners. All of the claims in Cause #2797 were asserted against Peelers Company, a partnership, and its individual members. In Cause #2350 Laitram Corporation, successor in interest to the Peelers partnership, was named, duly served with process and participated in the proceedings as a party. In the jury instructions, for brevity, the parties asserting the claims were called claimants, and the adverse parties were called defendants. The same designations will be used herein.

The claims were presented for consolidated jury trial on the contentions of the parties and the issues specified in the final pretrial order. Upon the stated contentions and issues recovery by any one or more of the claimants was possible under any one of the following bases of recovery: (1) restraint of trade by a combination of defendants in violation of Section 1 of the Act; (2) monopolizing in violation of Section 2 of the Act by a combination of defendants; (3) monopolizing by a single defendant; (4) attempting to monopolize by a singe defendant; attempting to monopolize by a combination of defendants.

There was substantial evidence from which the jury might reasonably have found facts sufficient to sustain recovery by one or more of the claimants on any of the above grounds asserted by claimants. Therefore, it was required that all of the several alternative bases of recovery be submitted to the jury under instructions stating claimants' contentions and the essential elements of each alleged basis of recovery. Unless these circumstances are constantly kept in mind the contentions raised by defendants' motions for judgment n. o. v. and for new trial cannot be correctly understood and fairly determined. Early in the charge the jury were instructed:

"The instructions are prepared as an inter-related whole, that is, everything stated in one part or phase of the instructions is stated in the light of and to be considered with all other statements or parts or phases of the instructions. This means that no juror should take some particular part or

260 F. Supp. 196

phase of the instructions, isolate it and consider or apply it apart from all else stated in the instructions. The point is that not all that is to be said on any subject can be said in a single sentence or paragraph or even page, perhaps, and if each particular matter were to be repeated each time it was applicable, the instructions would go on interminably.

"Therefore, each particular principle applicable to the case is stated for the most part once; sometimes it may be necessary to repeat to some extent or by reference. Every statement in the instructions is made on the assumption that the jury will apply that particular statement in the light of all other statements made in the instructions. This is a vital and essential assumption, and if the jury do not do that, but take some particular statement in the instructions and fail to consider it in connection with the other applicable principles stated in the instructions, the jury will, of course, be defeating the object of the instructions, which is to state the whole law of the case and to be applied by the jury as the whole law of the case."

The substance of this admonition was again stated at the end of the charge. The directions thus given the jury are equally applicable in examining defendants' post-verdict motions and would be violated by an out-of-context consideration of any of the questions now presented.

Because of the variety of possible bases of recovery and of fact issues, much time and effort were expended by the court in the preparation of instructions covering, without unnecessary repetition, all subject matter required to be included in the charge. To assist the jury in understanding and applying the instructions and in considering the evidence as related to the several Sherman Act violations asserted by claimants, a copy of the entire charge, captioned and indexed by subject matter, was in the juryroom for reference and study by the jury throughout their deliberations.

In the recited circumstances it would be especially misleading and unfair both to the jury and to the court, to review any post-verdict contention apart from the pre-verdict situation or to consider any particular statement in the instructions separate from and unrelated to all other statements contained in the charge. Also, it is essential that the special and general verdicts be considered in relation to each other and that all the verdicts be interpreted in the light of the entire instructions upon which the verdicts were determined by the jury.

From the special verdicts it is clear that the recoveries awarded by the general verdicts were based solely on a finding by the jury that defendants had violated Section 2 of the Sherman Act by single-firm monopolization in excess of patent monopoly. This ground of recovery was clearly within claimants' contentions in the pretrial order although not emphasized by isolation from the several other asserted grounds of recovery now eliminated by the special verdicts. Since approval and entry of the final pretrial order the court has always considered alleged single-firm monopolization to be within the issues for trial and has never understood any counsel to assert otherwise until such contention was urged in the briefs on the post-verdict motions.

Section 2 of the Sherman Act expressly condemns monopolizing by a single individual or firm:

"Every person who shall monopolize * * * any part of interstate trade or commerce shall be in violation of this act."

Monopolizing was defined in the jury instructions as follows:

"Monopolizing is the acquisition or retention of power to control prices, or to exclude competitors in interstate commerce in commodities sold or distributed in the same market. The power to monopolize does not necessarily require that entire control of pricing or competition be acquired of the market in a particular commodity. The Sherman Act prohibits the monopolizing, in excess of lawful patent monopoly,

260 F. Supp. 197

of any part of the market for any product in interstate trade or commerce."

The quoted definition, at least for the purposes of this particular litigation, is fully supported by numerous decisions of which the following are typical: United States v. E. I. Du Pont De Nemours & Co., 351 U.S. 377, 76 S.Ct. 994, 100 L.Ed. 1264; American Tobacco Co. v. United States, 328 U.S. 781, 66 S.Ct. 1125, 90 L.Ed. 1575.

Repeatedly it has been held that monopoly rights granted by a patent are not absolute but are limited by the Sherman Act and by other laws not now pertinent.

"* * * Possession of a valid patent or patents does not give the patentee any exemption from the provisions of the Sherman Act beyond the limits of the patent monopoly." United States v. Line Material Co., 333 U.S. 287, 308, 68 S.Ct. 550, 561, 92 L.Ed. 701.

"The limited monopolies granted to patent owners do not exempt them from the prohibitions of the Sherman Act and supplementary legislation." Standard Oil Co. (Indiana) v. United States, 283 U.S. 163, 169, 51 S.Ct. 421, 423, 75 L.Ed. 926.

"* * * the patent monopoly may not be used to disregard the antitrust laws * * *." Sears, Roebuck & Co. v. Stiffel Co., 376 U.S. 225, 84 S.Ct. 784, 788, 11 L.Ed.2d 661.

"* * * Rights conferred by patents are indeed very definite and extensive, but they do not give any more than other rights an universal license against positive prohibitions. The Sherman law is a limitation of rights, —rights which may be pushed to evil consequences and therefore restrained." Standard Sanitary Mfg. Co. v. United States, 226 U.S. 20, 49, 33 S.Ct. 9, 15, 57 L.Ed. 107. Hartford-Empire Co. v. United States, 323 U.S. 386, 406, 65 S.Ct. 373, 384, 89 L.Ed. 322.

A basic purpose of the Sherman Act in condemning monopoly was to protect competition and prevent unreasonable impairment thereof.

"In the Sherman * * * Act, Congress was dealing with competition, which it sought to protect, and monopoly, which it sought to prevent." Standard Oil Co. v. Federal Trade Comm'n, 340 U.S. 231, 248, 71 S.Ct. 240, 249, 95 L.Ed. 239.

"The basic and underlying purposes of the antitrust laws are to preserve competition and to protect the consumer." Conference of Studio Unions v. Loew's, Inc., 9 Cir., 193 F.2d 51, 55.

Many other decisions are to the same effect.

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